Application: Strategy, NDP/NSD, Pricing, Communications

The Concept

The concept of differentiation suggests that an offer from a company should be made to be distinct and unique by marketers. It is the exact opposite of a commodity. This uniqueness has several effects:

(i) It sets the offer apart from competing ideas or products.

(ii) It earns superior profits for the business owners.

(iii) It gives the offer its own perceived value, a unique price point. In fact, it is probably true to say that it is not possible to create a real value proposition without some form of differentiation.

(iv) It attracts a segment of customers and commands their attention for years.

(v) It commands a unique position in the market.

(vi) It circumvents or obviates price pressure.

(vii) It allows companies to expand into other opportunity areas (see repositioning).

There are several ways in which differentiation can be developed:

(i) By branding (see separate entry): One of the characteristics of a brand is its uniqueness and its appeal to a group of human beings. The design of a product brand, service brand, or corporate brand involves the creation of a truly differentiated offer which will distinguish it from rivals for many decades.

(ii) Through customer insight (see entry under behavioural aspects of marketing): The response to a unique human insight can create a means ...

Get The Marketer's Handbook: Reassessing Marketing Techniques for Modern Business now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.